Group of Seven Leaders Conclude Summit, Cite Economic Recovery

AS two or three police officers stood on nearly every street corner on the main road leading from the central train station to the Bay of Naples, the leaders of the Group of Seven industrialized nations announced that economic recovery is under way, inflation is down, and new jobs have been created.

The G-7 leaders also agreed yesterday to press all parties in the Bosnian war to accept the peace plan presented to them last week. ``The consequences of not reaching a settlement are serious,'' said British Prime Minister John Major. ``The risk of that war spreading is a real risk.''

But President Clinton failed to win concessions from the Japanese on the imbalance of trade between the United States and Japan, considered a key factor in the current weakness of the US dollar.

The summit was overshadowed by the sudden death of North Korean dictator Kim Il Sung, whose passing added an air of uncertainty to the diplomatic world. Summit leaders urged a solution to North Korea's withdrawal from the International Atomic Energy Agency.

``We will obviously monitor very carefully the period of transition,'' said Canadian Foreign Minister Andre Ouellet following Kim's death.

The heavy Naples security came as heads of state, foreign ministers, and financial ministers from the United States, Canada, Britain, France, Germany, Italy, and Japan met in what Naples's leading judge called the Italian capital of crime.

Russian President Boris Yeltsin took part in the final day of talks, which focused on international political issues; his participation was an innovation at what used to be a strictly economic meeting of Western nations and Japan.

``This is a historic moment for Russia and its relations with its main partners in the international community,'' a British official said.

Particular concern was expressed by the leaders over the safety of Ukraine's Chernobyl nuclear reactor, at which a serious accident occurred in 1986. They pledged $200 million in grants to help close down the reactor, provided that Ukraine ensures adequate safety standards at reactors under construction, increases energy conservation, and develops use of alternative energy sources.

``We have to get the Ukrainians to understand that it's all conditional on a reform process,'' said British Chancellor of the Exchequer Kenneth Clarke.

The G-7 leaders said that although progress had been made on employment, joblessness among its members (more than 24 million) remains far too high. To help correct the situation, they pledged to increase investment in education and job training, eliminate ``excessive regulations,'' and encourage innovation, particularly by developing the much-discussed global information infrastructure for computers.

Summit countries supported efforts to tear down trade barriers, but their approval fell short of the US proposal to launch a new round of global trade talks envisioned to address barriers on telecommunications and financial services, among others.

The leaders called on the Arabs to end their boycott of Israel and praised ``South Africa's transition to full democracy,'' saying this latter development would ``open up new opportunities for trade and inward investment.'' The G-7 leaders also condemned the massacre of seven Italians in Algeria on the eve of the summit.

Italian Prime Minister Silvio Berlusconi and his foreign counterparts set two agenda items for next year's summit in Halifax, Nova Scotia: finding a way to create sustainable development without excessive inflation and adjusting the Western world's institutions to meet the challenges of a post-cold-war world.

For many Italians, the big news was not happening in Naples, but near Boston, with the 2-to-1 victory Saturday of Italy over Spain in the World Cup soccer match, which advanced Italy to the semi-finals. Neapolitans celebrated in a symphony of sight and sound probably unlike anything visiting diplomats and journalists had seen before.

Cars, motor scooters, and even bicycles flew down the main streets, with enthusiastic fans singing and shouting, blasting horns, blowing compressed air noisemakers, tooting on whistles, and frenziedly waving the Italian flag.

The soccer victory was the lead story in many Italian dailies, including the prestigious Corriere della Sera, despite the international meeting happening in their country.

Mr. Berlusconi, who is the summit host and who owns the Milan team that has supplied the coach and several players to the national team, could only have been delighted with Italy's triumph.

Mr. Clinton, in Italy for his second time this year after last month's D-Day celebrations, took time out from work to see Naples's artistic beauty, jog in the heart of the city and shake hands with enchanted crowds of Neapolitans, and sample the pizza. But the food didn't agree with everyone here. Japanese Prime Minister Tomiichi Murayama returned to the summit yesterday after a short hospital stay following dinner Friday night.

Mr. Major said he was pleased with the summit and he was clearly delighted at the fact his fellow leaders agreed with his proposal that future summits should be less formal in structure, to allow a freer exchange of views.

``It's more important to have better meetings than more meetings,'' said a satisfied British official.